By Barbara O’Neill, Ph.D., CFP®, firstname.lastname@example.org
In December 2022, OneOp held its eighth annual webinar to review noteworthy personal finance events. Among the topics discussed were high inflation, Federal Reserve interest rate hikes, increased mortgage interest rates and car prices, Series I U.S. savings bonds, and stock market volatility.
The webinar also described the following military-specific financial events that occurred in 2022:
- Thrift Savings Plan (TSP) Access Changes– TSP, the tax-deferred defined contribution savings plan for service members, made a number of changes in 2022 including enhanced account security features and personalized participant support, and a new virtual assistant called AVA.
- TSP Investment Process Changes– The TSP introduced new procedures for fund election (asset allocation percentages for new deposits), reallocation (reallocating asset class weights for an entire account balance), and transfer (moving some money between TSP funds without affecting the rest of the portfolio). There were also changes to TSP loan and beneficiary designation procedures.
- TSP Mutual Fund Window (MFW)– In addition to existing G, F, C, S, I, and L funds, TSP participants now have access to thousands of mutual funds through the MFW. However, they may not invest more than 25% of their TSP balance in the MFW at any time.
- Increased BAH– The Basic Allowance for Housing (BAH) is regularly reviewed to insure that it reflects housing market volatility. In 2022, the Department of Defense instituted an automatic increase in 28 military housing areas with 20%+ increases in rental costs above BAH from October 1 through December 31.
- Other Economic Stability Initiatives- Plans announced in 2022 to reduce financial pressures on military families include reducing commissary costs, an income-based basic needs allowance, and actions to pre-empt out-of-pocket expenses associated with PCS moves and to facilitate military spouse employment.
- Final Year of SBP-DIC Offset– In 2022, Survivor Benefit Program (SBP) benefits for surviving military spouses were reduced by no more than one-third of Dependency and Indemnity Compensation (DIC) received from the Department of Veterans Affairs. In 2023, the SBP-DIC offset is eliminated in total so survivors can receive full benefits from both programs.
- Financial Well-Being Assessment– The Department of Defense Office of Financial Readiness introduced the Financial Well-Being Assessment as an online personal finance check-up tool for military families. This 12-question tool provides a score, an analysis of the score, and links to additional resources.
- Joint Travel Regulations (JTR) Update– Military retirees now have 3 years (versus one year, previously) to execute their final move to a post-military “forever home” and coordinate the transportation of their household goods. These changes provided more time to transition into retirement and make an informed decision.
For additional information about 2022 personal finance events, review the webinar event page.